The legal issue involving Liverpool’s former uniform provider is similar to the one they had with the Reds earlier in 2019.
The Serie A club plans to partner with a different kit manufacturer, Adidas, starting with the 2023–24 season, according to the Italian sports business website Calcio e Finanza, via Sports Pro Media. New Balance supplied Liverpool’s uniforms from 2015 to 2020.
Boston-based A multi-year contract between New Balance and the Serie A team was signed in 2021, and it was reportedly worth between €3 million and €4 million per season. However, according to financial statements from AS Roma, New Balance filed an arbitration claim against the Giallorossi club in June before the International Chamber of Commerce.
“According to New Balance, the technical sponsorship contract for the manufacture of football shirts currently in place between the companies for the 2021–2022 and 2022–2023 seasons would contain a Right of First Refusal clause in favour of New Balance which, if exercised in the presence more competing offers [sic], would oblige AS Roma to renew the contract with New Balance, provided that the latter matches the terms offered by third parties,” read the statement.
“In New Balance‘s opinion, this would have been a permissible application of this clause, bringing the conditions provided to AS Roma by a third rival into balance (which, according to the most recent rumours, would be Adidas). As a result, AS Roma ought to have turned down the offer and extended their agreement with New Balance. As a result, New Balance asked that I AS Roma be required to extend its contract with New Balance and to stop any talks with the third competitor; and (ii) alternatively, that the offer be deemed invalid.”
Roma claim that they are not optimistic about winning and that “the probability of losing is probable.”
The issue that had to be resolved in the High Court in London in 2019 between New Balance and Liverpool and ultimately went in the Reds’ favor has some similarities to the current case.
Following the club’s decision to switch from New Balance to Nike starting in 2020, New Balance filed a lawsuit against Liverpool. While the deal had a smaller guaranteed annual sum from the US sportswear giant, it had a significant upside in that the Reds would receive a 20% cut of all sales of Liverpool-branded merchandise worldwide. The club thought that eventually their £35 million per year contract, which was £5 million less than what was being received by New Balance, into one worth £60m to £70m per year over time.
In support of their claim, New Balance cited a clause in the contract that would allow them to continue supplying the Reds’ uniforms should they be able to match prices given by rivals. Liverpool contended that New Balance was unable to provide a competitive offer because of the marketing value that Nike could provide through their access to global icons like rapper Drake, tennis great Serena Williams, and Fenway Sports Group partner and basketball icon LeBron James. Another important factor was Nike’s capacity to distribute its products globally and in additional markets.
In his favorable decision in October 2019, Mr. Justice Teare stated that “the New Balance offer on marketing was less favorable to Liverpool FC than the Nike offer.”
Liverpool spent more than £550,000 on the legal battle, with New Balance covering 20% of that cost in the wake of the High Court ruling.
Because James is a part-owner of FSG, which makes him a part-owner of Liverpool, as well as Nike’s most well-known athlete worldwide, the two companies are committed to working together for the long term and have a number of harmonious connections.
There are also more recent investments made by Nike in the SpringHill Entertainment Company of James and Maverick Carter, another FSG partner, along with Liverpool owners FSG and 11% FSG shareholder RedBird Capital Partners.